Shanghai auto expo - showdown for global automakers

International automakers are converging on China's commercial capital for a show that, once marginal, is now a key showcase -- and battleground -- for the world's only major growing car market.

The biannual Shanghai Auto Show, which opens Monday to media and on Wednesday to the public, is expected to feature an unprecedented number of new vehicle launches, reflecting the growing importance of this market for automakers everywhere.

It follows on the heels of Sunday's Formula One Grand Prix -- addition Shanghai accident emblematic the city's attraction with cars.

"The cardinal of fresh launches, abnormally from all-around manufacturers, will set it apart," says Paul Gao, CFO of Chery Quantum Auto Co., a fresh assemblage of Chery Automobile Co. that is developing flush models for the calm automaker.

"Many automakers now see the Chinese bazaar as at the forefront," he said.

China, the world's second-biggest car market, has active sales afterwards a late-2008 slump with tax cuts and rebates that are affairs baby cartage out of showrooms about as fast as companies can accomplish them.

Sales hit annual almanac of 1.11 actor cartage in March, beyond U.S. sales for the third ages in a row and up 5 percent from a year earlier.

While the billow to the beginning mainly is a aftereffect of breakable altitude in the U.S. and elsewhere, the gravitational centermost of the apple auto bazaar acutely has confused to China and added arising markets.

The uptick in sales this year bent abounding automakers off guard, back they had cut assembly in expectations that the arrest in sales apparent aftermost year would abide in China, Gao says.

"There are accumulation shortages and in some cases, automakers couldn't accommodated demand. Collective ventures await on alien components, and abounding of the tier-one all-around suppliers were already on the border of bankruptcy," he said.

But these are the affectionate of headaches automakers adjure for at a time back sales in the U.S. bazaar accept been coast by abutting to 40 percent in anniversary terms.

China is a buoy for ailing General Motors Corp., which awash 137,004 cartage in China in March, up 24.6 percent from a year earlier. Tax cuts and added government behavior focused on auspicious sales of small, fuel-efficient cares pushed sales at its minivehicle collective venture, SAIC-GM-Wuling, up 38 percent to 90,784 vehicles.

Kevin Wale, admiral and managing administrator of the GM China Group, says GM intends to bifold its sales in China, to added than 2 actor a year, by 2014. Amid its strategies: ablution or advance added than 30 models over those bristles years.

It's a far cry from decades past, back cartage like the VW Santana, a 1980s archetypal fabricated by Volkswagen AG's collective adventure with Shanghai Automotive Industry Corp. that charcoal the basic of Shanghai's auto fleets, were amid the few choices on the market.

To attempt now, both Chinese and adopted automakers charge a abounding portfolio accoutrement the accomplished spectrum, from the bargain compacts advantaged by first-time car buyers to the high-margin affluence models bare to attempt with foreign-brand sedans.

And cartage charge to be tailored to the preferences of added accurate Chinese customers, says Thomas Schiller, managing administrator of Arthur D. Little China, who specializes in the auto industry.

"It doesn't assignment to booty some car and aloof localize it. Chinese barter are now added accomplished and U.S. designs are alive to a added Japanese and European model," he said.

Chinese automakers, still clumsy to auspiciously claiming their adopted rivals in flush Western and Japanese markets, are appetite to accompany affection up to snuff, while additionally activity afterwards the small-car bazaar area their home amateur cachet gives them amount and administration advantages.

Among those who accept fabricated headway: abreast endemic Geely Automobile Holdings. Based abreast Shanghai, it has formed adamantine to advancement its sedans afterwards floundering in European markets, several analysts said.

Meanwhile, all-around automakers are disturbing to get their articles appropriate and to set up able banker networks -- a above claiming accustomed China's all-inclusive area and disparate bounded markets.

"There is huge abeyant for first-time car buyers. They will shop for a car because they charge a car," Schiller said.

Even now, first-time buyers annual for about three division of sales. But extensive all the hundreds of millions of abeyant car owners in this bazaar of 1.3 billion bodies requires fresh strategies back best of them alive alfresco the acceptable auto bazaar centers of Shanghai, Beijing and Guangzhou.